Wall Street Bull: "US Productivity Boom a 'Golden Magic'... Best News for the Fed"

Jeremy Siegel, a leading bull on Wall Street and a professor at the Wharton School of the University of Pennsylvania, predicted on the 21st (local time) that the U.S. economy, supported by solid productivity, will avoid a recession while continuing the trend of slowing inflation.

Image courtesy of CNBC Korea

Appearing on CNBC's Squawk Box that day, Professor Siegel said, "Last quarter was the most productive quarter in six years, excluding the first few months of the pandemic." According to the U.S. Department of Labor, nonfarm labor productivity increased by 3.7% quarter-over-quarter. He expects this positive productivity trend to continue into the third quarter.

Professor Siegel described this as "saving Federal Reserve Chairman Jerome Powell" and called it "the best news." He explained that this level of productivity makes the Fed's mission to achieve price stability easier. He said, "It is a way to achieve strong GDP growth without putting pressure on the labor market or strongly triggering inflation," calling it "golden magic."

Earlier last week, he also evaluated that this U.S. productivity would be the driving force behind disinflation and that the possibility of a soft landing has increased.

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